Got a tip for us?
Let us know
Become a MacRumors Supporter for $50/year with no ads, ability to filter front page stories, and private forums.
Apple to Replace AT&T in Dow Jones Industrial Average on March 18
- Thread starter MacRumors
- Start date
- Sort by reaction score
The goal of the DJIA isn't to have to most money, it's to accurately represent the state of the Market with a comparatively few index stocks.
That purpose is highly debatable, if only because composite indexes weren't available when the Dows were created, but they are now. Not only are they available, buy they can be viewed by anyone in real-time. The DJIA was created in the days when a simple barometer was needed to reflect market performance, one that could be computed daily with an adding machine. The DJIA is a dinosaur. It really should not even exist anymore.
I agree completely.
I've been using Macs at home for years, they've been exemplary. We've had several hundred deployed at work along with an equal number of Windows machines and the Macs are very popular in that environment as well.
When Apple Computer Inc. became Apple Inc. All of us had the same concern, that Apple would morph into a gadget/smartphone centric entertainment company and mass market gadget provider.
Then came the declaration that became fashionable: It's the Post PC Era.
I do think that it's accurate to acknowledge the increased role of handheld devices, yet replacements for the PC/Mac they are not. At least not at this juncture and quite likely it will be years if ever.
Oh sure for the home user with lightweight requirements an iPad can take the place of their under utilized computer, but for research, design, and various large scale computing endeavors a powerful MBP, Mac Pro or PC is absolutely essential.
It would be very encouraging to see Apple renew their commitment to pure computers... instead of accelerating the eventual convergence of iOS / OS X into one simple lightweight consumer facing OS.
You can thank BBDO Atlanta for those ads. And the one before with the children answering questions.
Since the Dow is a price-weighted index it is entirely irrelevant to any investor who understands basic finance.
wow she's really cute.
Curious if anyone knows what the name of the actress is, or you all refer to her as "the AT&T girl".
It's amazing how people keep insisting that they know about things like this when even the simplest web search proves they are posting complete and utter nonsense.
Here's what Dow Jones themselves say about the rubbish you've just posted:
"...in 1928, the Journal editors began calculating the average with a special divisor other than the number of stocks, to avoid distortions when constituent companies split their shares or when one stock was substituted for another. Through habit, this index was still identified as an "average."
Source http://www.djaverages.com/index.cfm?go=industrial-overview
Curious if anyone knows what the name of the actress is, or you all refer to her as "the AT&T girl".
Milana Vayntrub
Still does not prove your point, sorry. AAPL was never going to be added into the DJIA until after it split because it is not a trade-weighted average no matter what you say. Would they adjust for a stock split if it was already part of the index? Sure, but not before.
So basically you've turned a fact into rubbish.
Curious if anyone knows what the name of the actress is, or you all refer to her as "the AT&T girl".
Milana Vayntrub. She's an ethnic Russian, born in Uzbekistan, and a naturalized American.
Dumping AT&T does seem an odd choice, Boeing are still there despite only just scraping into the top 50 companies by market cap then AT&T are 25th, and Disney is roughly the same size as AT&T but don't really fit any normal definition of 'industrial'.
Last edited:
This is the other big problem with the DJIA: it is not only managed, but managed by a committee. It changes to represent whatever elements of the markets the committee decides at any given moment are representative of what they want to represent.
It's refreshing to read a post by someone that understands. Moreover my thought is perhaps Apple was added to bring some fresh attention to the group. After all there's a few rather stodgy old companies on the list.
Dumped my T long ago. As far as I am concerned it is one of the bigger laughing "stocks" on the market for quite awhile.
Dumped my T long ago. As far as I am concerned it is one of the bigger laughing "stocks" on the market for quite awhile.
Not exciting, but solid........and yielding over 5.5% at the moment. Not a lot of growth prospects but nothing to laugh at there.
Ignatius is correct.
Do you really not understand the DJIA, and why AAPL had a snowball's chance in hell of being in the index before the split? If there really was such a "special divisor", why is the Verizon split essentially forcing the issue?
As you said, "t's amazing how people keep insisting that they know about things like this when even the simplest web search proves they are posting complete and utter nonsense."
The DJIA does use a special divisor, but you're correct that AAPL would never have been added to the DJIA had it not split (unless, I suppose, it lost most of its value). If it were added to the DJIA at its current valuation, but without the split, it would by itself make up about a quarter of the total value of the DJIA. They just wouldn't add a stock with that high a price ($800 plus), it would distort the average too much going forward. I recall people speculating at the time the Apple stock split was announced that part of the reason for the split might be to make it possible for AAPL to be added to the DJIA.
I think AndyUnderscoreR may be misinterpreting the effect of the DJIA divisor. It doesn't adjust the weighting of stocks that are in the index relative to each other, such that stocks with really high values could be added to the index and not have an outsized impact on what the DJIA does going forward. Rather, it allows, e.g., one stock to replace another without immediately changing the value of the DJIA. A $1 movement in the price of any stock has the same effect on the DJIA, regardless of whether that stock's price was previously $40 or $200. The divisor doesn't alter that reality, it only alters how much of a movement in the DJIA results from any such $1 movement in the price of a component stock.
The current DJIA divisor is about .1557. If they were to replace T (at about $33) with AAPL (at about $127), without adjusting the divisor, the DJIA would jump by about 600 points for no reason - meaning, for no other reason than that a component switch was made, not because of any movement in the prices of component stocks. Historic comparisons would lose (even more of) their value. So, when AAPL is added, the divisor will be adjusted - to something like .161, depending on the prices of T and AAPL at the time - such that the switch itself doesn't much affect the value of the DJIA at that time.
Apple's revenge for the crap they had to deal with when AT&T was their exclusive iPhone partner.
----------
Very nice girl.
----------
Very nice girl.